Swansea City Supporters Trust dispute selling shareholders' claim

Stormy sky over Liberty Stadium
Swansea City's relegation to the Championship in 2018 ended a seven-year stay in the Premier League

Swansea City's off-field problems continue to mount with the club's Supporters Trust in dispute with those who sold their shares during the Swans' American takeover in 2016.

At the time of the takeover, the Trust said it was "disappointed" by a "lack of engagement" over the shares sale, contravening what it said was a shareholders agreement.

Since then, Swansea have been beset with off-field tensions and, after last season's relegation from the Premier League, a particularly turbulent start to this year led to chairman Huw Jenkins' resignation earlier this month.

The Trust had arranged for all parties - including majority shareholders Steve Kaplan and Jason Levien - to attend mediation in order to avoid going to court over the dispute regarding the shares sale, and a date was set for this month.

Mediation, as used in law, is a form of alternative dispute resolution, a way of resolving disputes between two or more parties, with a third-party mediator helping the two parties to negotiate a settlement.

Lawyers acting on behalf of the selling shareholders claimed the Trust withdrew from the mediation on two occasions - but the Trust says this is "patently untrue".

"As our members will be aware, the first proposed mediation towards the end of last year was cancelled due to the late decision of Jason Levien not to attend," the Trust said in a statement.

"It should also be noted that it became clear in the last week that neither of the managing partners of the majority shareholders, Steve Kaplan or Jason Levien, were planning to attend the proposed February mediation dates either, in spite of the Trust having made it clear that the attendance of one of them was vital if the Trust was to commit to spending thousands of pounds on a mediation."

Kaplan and Levien had arranged for club director Robert Hernreich and the Swans' director of business and legal affairs, Samuel Porter, to attend the mediation in their absence.

The majority shareholders confirmed those arrangements with the Trust in a letter written in December, with Hernreich and Porter given the authority to make decisions.

The Trust statement continued: "Although alternative attendees were suggested, a mediation is much less likely to be productive while the managing partners of the club's owners are not prepared to fully engage.

"It was again the Trust which took the initiative and proposed mediation this year, by letter from its lawyers on 16 January.

"This specified that Huw Jenkins and the other selling shareholders represented by IPS Law should deliver their response/defence letter by 31 January.

"As noted already, last Friday, though IPS Law, they refused to do so and in so doing rejected the Trust's proposal for a mediation.

"That, coupled with the refusal of Messrs Levien and Kaplan to attend, is the reason that a mediation has not gone ahead. The published allegation that the Trust unilaterally withdrew at the last minute is simply untrue."

The Trust statement was in response to one issued by the lawyers acting on behalf of the selling shareholders, which read: "We are surprised and extremely disappointed to have received notification from the Swansea Supporters Trust's lawyers today that neither they nor the Trust wish to attend the mediation which had previously been proposed to take place later this month.

"Dates for the mediation had been agreed with the Trust and we had full authority from all of our clients to attend the mediation and resolve the dispute that exists between the parties.

"The Trust's representatives have now however notified us that they will not be attending the mediation despite this being very much at odds with what the Trust have conveyed to the public in recent statements about their willingness to mediate. This may have significant costs consequences for the Trust in any future litigation especially as the Trust has previously failed to mediate in December 2018.

"The selling shareholders are strong in their belief that they are in no way liable to the Trust for the circumstances surrounding the sale of their shares but continue to be saddened that the issues between them and the Trust remain unresolved and the club tragically continues to be damaged in the process."

In response, the Trust also said in its statement: "It is astonishing that they accuse the Trust of trying to damage the club when we look at the current league position in comparison to 2016."

Jason Levien (back left) and Steve Kaplan (back centre) watch Swansea with then chairman Huw Jenkins (front left) in 2017
Jason Levien (back left) and Steve Kaplan (back centre) watch Swansea with then chairman Huw Jenkins (front left) in 2017

How did we get here?

Swansea's rise from the fourth tier and near financial ruin to the Premier League - all in less than a decade - was the stuff of fairytales.

The fact they did it while playing attractive football on a modest budget and with a fans' representative on the club's board all added to their status as a model club.

But after five years in the top flight, that pristine reputation began to unravel in 2016 when Steve Kaplan and Jason Levien led a 27-person consortium which bought a controlling stake in the club.

Swansea City Supporters' Trust, which owns a 21.1% shareholding, was unhappy that it was excluded from some of the negotiations regarding the shares sale and said it was considering taking legal action.

With poor results on the pitch and a subsequent frequent turnover of managers, fans started to turn on Kaplan, Levien and the existing directors who had sold their shares to substantial personal profit.

Chairman Huw Jenkins and his fellow selling shareholders were accused of greed, and criticism levelled at him and the American owners intensified as Swansea were relegated at the end of last season.

The club hierarchy has since overseen a period of severe cost-cutting in the Championship - with several first-team players sold - which has led to fan protests and an increasing sense of discontent at the club.

The Trust had long been calling for Jenkins to resign and he did so on Saturday, 2 February.

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